Office of Naval Research - National Transportation Library

Section 5.0 SSS Costs: Direct Construction and OperationCosts Versus Avoided Costs of Alternative ModesThis section reviews the performance and operational parameters of the existing as well asevolving vessel systems, their construction and operating costs, the avoided external costs ofhighway trucking, and estimates of their potential impacts.5-1 Vessel Construction and Operating Cost for SSSCapital and operating costs for several prototype SSS vessels have been estimated by GlobalInsight. Table 10 shows the range of capital and operating cost for five prototypecontainerships and RoRo vessels of different size and operating capabilities. The capitalcosts range between $38 million to $90 million for speeds of about 25 knows. Dailyoperating costs range between $12,000 and $21,000.Table 10 – Estimated Construction and Operating Costs for Representative SSS VesselsContainershipsRoRo VesselsCost Components 500 TEU 200 TEU 350 Trailer 140 Trailer 200 TrailerFerryCapital Costs $80 $38 $90 $44 $50($Million)Speed (Knots) 25 25 25 25 20Crew size 12 10 12 10 8Vessel ExpensesCrew Costs/Day $7,500 $6,500 $7,500 $6,500 $5,000Maintenance $1,750 $875 $1,750 $875 $1,000Costs/DayConsumables $1,000 $600 $1,000 $600 $600Insurance & Other $1,250 $625 $1,250 $625 $700CostsSubtotal Costs/Day $11,500 $8,600 $11,500 $8,600 $7,300Depreciation* $8,767 $4,164 $9,863 $4,822 $5,479Total Expense/Day $20,267 $12,764 $21,363 $13,422 $12,779Source: Global Insight, based on Reeves and Associates estimates; p. 38* Assumes straight-line depreciation over vessel life of 25 year.Data in Table 10 are based on direct construction and operating costs involved in movingfreight within a corridor. There are economic models that have estimated the RequiredFreight Rate (RFR) for each mode, trucking, rail, and SSS. For SSS carriers to competesuccessfully against the other mode, they have to charge a rate at or above their RFR in orderto break even. In addition to RFR, available economic models estimate the direct costs borneby the private shippers or carriers as well as the external costs of conducting that freightmove, i.e., the costs not paid by the users. For purposes of economic analysis, the directoperating costs of SSS should be compared with the avoided costs of moving cargo on thehighway by alternative modes on truck or rail. The avoided costs include external costs ofONR SSS Final Report 53